LED industry currently encountered difficulties including bid farewell to high growth period, according to the survey, begin from 2015, double-digit growth has been spent, industry into the slow growth of the new normal. Secondly, sales growth, but the decline in profits. The third is the price spread, erosion most industry profits, many LED companies are forced to withdraw from the market. But also contain the opportunities and challenges, such as new three board mechanism gradually improve, reduce enterprises enter the capital market threshold, bring numerous small and medium-sized enterprises (smes) opportunities.

In addition, the acceleration of industrial structure upgrade, under the new normal economy, industrial structure upgrade is the inevitable choice of enterprises. Internet + 4.0 for national policy and industry, conform to the historical trend. Broken, can through the industry mergers and acquisitions, he pointed out that industry trough is the merger and acquisition opportunities. While on the road of mergers and acquisitions, can choose the industrial chain integration and cross-industry mergers and acquisitions. The speech specific content of the day, has been by the think tank royal written up, see below.

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Shenzhen guosen hong sheng executive general manager Chen Xiaohai equity investment fund management co., LTD

Dilemma: sales growth slowing

According to Chen Xiaohai said, he is the least, to the development of the whole market because until last year, has been engaged in manufacturing investment, transformation is the last year to do Internet + industry investment. Focus on the LED industry since 2007, he obviously felt the market capacity for the whole China's emerging industry is very big, very fast growth in the emerging industry, gross margin is also very high, so there will always be capital flooded in. From 2007 to 2010, as a result of the government's guidance, and the characteristic of the capital itself, cause a large amount of capital into the LED industry, also contributed to the whole industry overcapacity situation.

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According to the above, first of all, you can see, the whole of China's lighting industry continues to grow, but growth slowed significantly. According to the Chinese industry information network data, 2015 domestic lighting industry sales of 560 billion yuan, up 8% from a year earlier. After lighting industry rapid development from 2009 to 2011, 2012, has started to decline in growth momentum, and performance in 2015 is most obvious, growth is down to single digits. Since 2015, double-digit growth no longer anti, industry into the slow growth of the new normal.

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The second situation is profit fell sharply, according to the 2015 annual report of listed companies to 37 lighting industry statistics, 70.3% of the listed companies in 2015 revenue growth in 2014, but the net profit growth enterprises accounted for only 56.7%. Domestic LED lighting permeability in 2015 reached 30%, the sunlight illumination, foshan lighting leading enterprises in 2015 LED sales accounted for more than 50%. Industry LED the company sales rise, but industry overcapacity serious, overcapacity will lead to competition is intense, and then the big price war, the spread of the price war makes a significant decline in profits. And because innovation is insufficient, gross margin is natural couldn't get on.

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According to its introduction, LED lighting the whole industry chain are facing fierce price war. LED bulbs price movements are falling, prices after a sharp fall in 2014, 2015 still obvious downward trend. The spread of the price war erosion most industry profits, many LED companies are forced to withdraw from the market.

Opportunities and challenges: capital, lower gross profit

Chen Xiaohai thinks, from the perspective of capital LED industry, under this kind of pattern, opportunity comes from two aspects, one is a big chance to open the capital markets, a chance is the integration of the industry. Capital market opening, with the new three board mechanism gradually improve, ushered in the opportunities and challenges. New three board mechanism qualitative change in 2015-2016, financing capability has significantly enhanced. New three board reduce enterprises enter the capital market threshold, bring numerous small and medium-sized enterprises (smes) opportunities.

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At present the entire capital structure will develop towards two directions, first, the nasdaq's organization pattern, also is a new three board, the wide into the wider market. But the market is agency is given priority to, is very high to the requirement of investors, is a professional market. The second is the shenzhen and Shanghai, is a mature enterprise capital markets, for there is no limit to the investors, the risk coefficient is low.

, he said, focuses on the two chunks of the capital market, because the LED enterprise level is uneven, at the same time, the LED industry market is too big, too scattered, no matter look from the middle and lower reaches, the entire industry from the upstream to the centralized acquisition, integration, stretching down to the lighting industry. All kinds of enterprises to choose what kind of way to enter the capital market, or not to enter the capital market, entrepreneurs should be have their own consideration. This aspect can introduce professional institutions in parts of the enterprise, and then you can understand my own business which should enter the capital market, do you want to enter the capital market.

Therefore, Suggestions he made to the LED industry enterprise operation way, the net income under twenty million or no profit of the enterprise, but the technology, products in the future of the space is very big, also can choose to walk the road of new three board. As for a 350 million annual net profit, but also can keep 10% 30% growth enterprise, can choose motherboard market impact.

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Due to the economy under the new normal, the upgrading of industrial structure is the inevitable choice of enterprises. Internet + 4.0 for national policy and industry, conform to the historical trend. So he said, another opportunity is 4.0 + Internet industry, this is the government of all innovation, mass background environment, is in view of the strategic emerging industries. Although LED industry development for many years, according to the principle that is also a new industry, but because the development soon, has gradually become a sunset industry of low margin.

Broken: industry chain integration, cross-border mergers and acquisitions

Chen Xiaohai pointed out that the industry's low industrial m&a opportunities. Among industrial chain business structure on a single industry recession, small scale of enterprises has a strong demand by mergers and acquisitions, enterprise can be done at a lower cost of the integration of upstream and downstream industries.

Upstream of the LED industry, in the past few years has been basically completed the integration of the market development for many years, profit is very thin, sure we won't have a lot of new capital. In the existing industry, mainly is to integrate the existing enterprise concurrently Evergrande, small businesses are likely to be merged. Market supply and demand is too big, the whole demand outpacing supply ability, so in upstream prices down dramatically, the innovation of the downstream will be faster and faster, into the people also more and more. In packaging field, for example, now anyone can be hundreds of thousands of began to enter the industry, the situation can be especially challenging in zhongshan, and then into a price war. But do encapsulation is not to say that no threshold technology, depends on its product positioning.

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Mergers and acquisitions way including industrial chain integration and cross-industry mergers and acquisitions in two ways. Last year LED the enterprise integration has two main directions, namely the whole industrial chain integration and cross-border integration. Cross-border integration is produced by the industry background, when the gem board opened in 2009, these packaging companies listed, easily 230 million profit impact gem, for them this is caught a lot of opportunities. Encapsulation of listed companies, because itself industry product structure, profitability has slipped, unable to maintain the market status of listed companies, but the financing ability. Is not leading in this industry, then can carry out cross-border mergers and acquisitions, do more main business, like culture and sports, Internet finance, car, car networking, etc.

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According to statistics, in 2015 the domestic LED large mergers and acquisitions investment in companies with 33 cases, involving more than 31.8 billion yuan. Main direction for industry chain upstream and downstream of mergers and acquisitions, accounted for 58%; Direction of cross-industry mergers and acquisitions involving the Internet, media, investment, financing lease, style, etc. Among them, the industrial chain in mergers and acquisitions in 2015, specific cases will include the starlight electric, root of LED industry, the business covers the epitaxial chips, packaging, sales of lamps and lanterns. HuaCan upstream sapphire photoelectric acquisition enterprise, grasps the core production of raw materials. Lehman shares into the football industry, cooperation fund set up Beijing LeiManKai xing sports culture, sports culture, sports, science and technology, the Internet in high quality to filter in areas such as target, reserves and incubation. Acquisition of Fahrenheit subway advertising media the media business, focusing on sports marketing resource to liquidate. Hon, the diversity of photoelectric industry development, taking a stake in the cayman network, enter the financial sector, the Internet and in denali science and technology, investment 30 million in guangzhou pearl course, into the Internet.